Annual Report on Tax Exemptions for Medicinal Cannabis

Annual Report on Tax Exemptions for Medicinal Cannabis Translate Our Website This Google ™ translation feature provided on the Legislative Analyst's Office (LAO) website is for informational purposes only. The LAO is unable to guarantee the accuracy of this translation and is therefore not liable for any inaccurate information resulting from the translation application tool. Choose your language: × Skip to main content Home --> Policy Areas Capital Outlay, Infrastructure Criminal Justice Economy and Taxes Education Environment and Natural Resources Health and Human Services Local Government State Budget Condition Transportation Other Government Areas Publications The Budget Propositions and Initiatives Staff Careers About Us Search LAO Contact Seth Kerstein See More Publications Like This Back to the Top --> Tweet June 13, 2024 Annual Report on Tax Exemptions for Medicinal Cannabis Statutory Data Reporting Requirement. Chapter 837 of 2019 (SB 34, Wiener) established new tax exemptions for donations of medicinal cannabis. The law directs our office to submit an annual report containing data on three outcomes related to the exemptions: the number of medicinal cannabis patients served, the amount of medicinal cannabis products donated, and the amount of tax revenue lost. This post fulfills that statutory requirement for 2023. Data Source. Our office obtained the data described below from the Department of Cannabis Control and the California Department of Tax and Fee Administration (CDTFA). The data come from the state s Metrc track and trace system for licensed cannabis. In particular, the data reflect transactions that businesses identified as medicinal donations in calendar year 2023. Number of Patients Served. In 2023, licensees identified 43,574 transactions as medicinal donations. The data do not tell us who received each donation. Some patients likely received more than one donation in 2023, so this total likely overstates the number of distinct patients. For example, if a patient received six donations in 2023, then the transaction total includes that person six times. Amounts of Products Donated. As shown in Figure 1, licensees donated a wide variety of products in 2023. Figure 1 Amounts of Products Donated Under SB 34 Exemption in 2023 Product Total Packages Capsule 6,207 Edible 158,222 Extract 21,191 Flower (other) 8,461 Flower (eighth) 52,512 Flower (gram) 3,396 Flower (half ounce) 3,679 Flower (ounce) 456 Flower (quarter) 6,079 Immature Plant 168 Infused Butter/Oil 1 Other Concentrate 14,770 Pre Roll Flower 24,910 Pre Roll Infused 37,129 Pre Roll Leaf 7,806 Seeds 1 Shake (eighth) 1 Shake (quarter) 100 Tincture 12,739 Topical 5,309 Vape Cartridge 30,001 Use Tax Revenue Lost. CDTFA estimates that the 2023 revenue loss from the SB 34 use tax exemption was roughly $259,000. Revenue from the use tax goes to the state s General Fund and to local programs. Cultivation Tax Ended in 2022. The cannabis cultivation tax ended on July 1, 2022. As a result, SB 34 s cultivation tax exemption had no effect in 2023. Subscribe | California State Legislature | Online Voter Registration | Privacy Policy | Accessibility Legislative Analyst's Office | The California Legislature's Nonpartisan Fiscal and Policy Advisor 925 L Street, Suite 1000 Sacramento, CA 95814 | (916) 445-4656